Gold Price News and Forecast: XAU/USD - The changing investment case for gold in 2020
|Gold Spot ($) Intraday: under pressure
Pivot (invalidation): 1465.50
Our preference
Short positions below 1465.50 with targets at 1458.50 & 1454.00 in extension.
Alternative scenario
Above 1465.50 look for further upside with 1468.00 & 1471.00 as targets.
Comment
The RSI is mixed with a bearish bias.
The changing investment case for gold in 2020
We head into one of the biggest weeks for event risk in some time and arguably the overriding risk plays out this weekend, where we find out if the scheduled 15% tariffs on $160b of Chinese exports (to the US) kick in. The consensus is we see a loose agreement to suspect the implementation of tariffs and to revisit talks and tariffs in late January/early February 2020. Of course, we could feasibly see tariff rollbacks, but that seems even more unlikely, and that would cause a strong positive reaction.
There has been some modest buying of USDCNH (offshore yuan) 1-week implied volatility, which tells me there are rising expectations of a move in spot USDCNH, but at 6.0425% it’s still very calm. We’ve seen some genuine interest in gold as a hedge against a negative reaction in risk from a tariff increase and certainly well above average volumes. I guess this is an out-of-consensus view, certainly when we contrast to the price action on the daily or weekly chart. as gold is finding sellers easy to come by and not a universally welcomed hedge. Read more...
Gold adds to overnight modest gains, up little around $1465 region
Gold edged higher for the second consecutive session on Tuesday and built the overnight modest gains, albeit lacked any strong follow-through.
Persistent uncertainty over a potential phase one trade deal between the world's two largest economies continued weighing on the global risk sentiment. The same was evident from a weaker tone around equity markets and underpinned demand for traditional safe-haven assets, including gold.
Bulls take cues from trade uncertainty
It is worth recalling that the deadline for the next round of US tariffs on around $156 billion worth Chinese products is December 15. However, the Agriculture Secretary Sonny Perdue fueled some optimism on Monday and said that the US is unlikely to impose more tariffs. Read more...
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